Mutations in Progranulin (PGRN), a gene encoding a secreted glycoprotein, are the major cause of Frontotemporal Lobar Degeneration with ubiquitin positive inclusions (FTLD-U). More recently, TMEM106B, a type II transmembrane protein of unknown function, was discovered as a risk factor of FTLD-U. But how PGRN and TMEM106B function together to prevent FTLD-U remains unclear. Our previous work has identified sortilin as a PGRN trafficking receptor. Our recent preliminary data further suggests that sortilin plays a role in mediating PGRN signaling. Lack of a signaling motif in sortilin intracellular region suggests the presence of a potential 'co-receptor. We found that TMEM106B physically interacts with sortilin and this interaction stimulates the cleavage of TMEM106B. Furthermore, TMEM106B is a substrate of regulated intramembrane proteolysis (RIP), which is known to play a critical role in neuronal signal transduction. Thus we propose that sortilin and TMEM106B form a receptor complex for PGRN and TMEM106B cleavage mediates PGRN signaling. To test this model, two specific aims are proposed. Aim1: To determine the role of sortilin/TMEM106B in PGRN signaling. We will first test the importance of sortilin and TMEM106B in PGRN signaling by measuring the neurotrophic effects of PGRN in neurons lacking sortilin or TMEM106B. Then we will determine whether PGRN signaling stimulates sortilin/TMEM106B interaction and TMEM106B cleavage. Aim2: To investigate the signaling mechanism of TMEM106B. We will first generate a cleavage resistant version of TMEM106B to determine whether TMEM106B cleavage is required for PGRN signaling. Then the cleavage product of TMEM106B will be expressed in NSC-34 cells to determine whether it has neurotrophic effects similar to PGRN treatment. We also plan to probe the downstream signaling mechanisms of TMEM106B cleavage product by examining its localization and identifying its binding partners. In summary, through these studies, we expect to establish a role of sortilin and TMEM106B in PGRN signaling and test a novel signaling mechanism involving TMEM106B cleavage. We expect our proposed studies will significantly advance our understanding on PGRN signaling mechanisms and will establish the first molecular characterization of TMEM106B and illustrate its role in neurodegeneration.